What are product analytics?

Product analytics is a term that refers to collecting and applying essential data to discover how and why users interact with a digital product or service.

Companies can utilize the insights that product analytics provide them to detect gaps in their user/customer experience, uncover chances for growth, and enhance their products based on accurate research findings.

The Importance of Product Analytics

To better understand which product features are the most popular, the amount of time it takes to complete tasks, how difficulties disrupt engagement, and other factors, you can use product analytics to help designers, developers, product managers, and other key figures.

Furthermore, Product analytics is critical because it enables businesses to understand how their customers interact with their technology goods in a real-world, everyday setting.

 Product Analytics vs. Other methods

Businesses may opt to solicit customer feedback through surveys or discussions. However, these approaches rely on the users’ recollections, honesty, and self-awareness to function effectively. While product analytics tracks real-time behavior, it cannot be contested because it is based on historical data.

Furthermore, suppose individuals choose not to complete a satisfaction questionnaire or refrain from sharing their whole experience. In that case, a corporation may be uninformed of serious concerns that jeopardize the user experience due to their decision.

As a result, product analytics come into play here.

The Benefits of using Product Analytics

Product analytics brings various benefits to help your company in the competitive market. To name a few:

It is an excellent analyzing tool

When product analytics are implemented, product teams have the tools they need to get visibility and accurately analyze the behavior of their users.

Customers derive value from the product, which features receive the highest utilization rates and frequency of use, which functions generate confusion or usability issues. Other factors can all be investigated by these professionals and others.


You can use it in a variety of settings

Product designers and developers can use this information while working on ongoing product upgrades or when developing entirely new goods. They will identify which elements are most valuable to the core audience and which details can be deleted or eliminated.

It helps you to give a better answer to your user’s needs

When product analytics is appropriately implemented, the offer will become more relevant and valuable to its users, resulting in increased retention and (hopefully) increased return on investment. A customer-focused, data-driven product personalized to the demands of users can give businesses a competitive advantage over their competitors.

Without credible and consistent feedback data, your Teams are left to speculate and make assumptions about what their users want if they do not access product analytics. And that’s not a good thing. It is impossible to dictate what viewers want. It is necessary to listen, observe, adapt, and refine products to provide the best possible solution for the target consumer.

How To Use Product Analytics

The following steps should be followed by companies planning to put product analytics into action to maximize their return on investment (ROI):

Defining objectives

Product teams should start with a clear understanding of the reasons for obtaining various types of data. Was it business objectives that drove these decisions, or were it something else?

So, what will the data collected tell you about the product’s performance, its target audience, and the possibility of modifications in the future? Developing a list of product analytics objectives is crucial so that teams do not put money into the process without knowing what they are seeking to learn. As a result, there is less chance of wasting resources, not to mention losing time.

Concentrating on actual value data

By doing that,  you will increase the likelihood of making valuable improvements. For example, you may discover that a significant section of your user base is having difficulty navigating the dashboard of a product as quickly and efficiently as they would like.

This might cause their entire process to slow down and cause them to become frustrated, which may lead them to explore elsewhere for alternatives that better meet their requirements.

After witnessing this misunderstanding in action, product teams can rapidly identify where they should concentrate on improving the user experience and increasing retention. If the dashboard’s designers, developers, and product managers remain blissfully unaware of the problem, utilization rates could drop precipitously without realizing it.

Keeping track of information in a precise and structured manner



Typically, data collected through product analytics is divided into categories called events. A single event refers to a single activity that a user performs with the product, such as sending an email, activating a feature, making a purchase, or combining these actions.

It is critical to plan so that the product team knows the events that you will track in the future. This should be documented in a readily available file to ensure that everyone involved knows what is going on.

This will provide a clear roadmap to the team regarding which steps are critical in the user’s journey, from when the product is launched to when it is closed.

Focusing on the most important events reduces the risk of missing how a user interacts with the product in a small but significant way. Even the smallest oversight can harm the user experience and the product’s commercial viability.

To grow and improve the product, you should only track events that present a chance to do so. It would be best if you did not track events because you’ve heard a competitor is doing so.

Common tools for Product analytics

After you understand what product analytics is and how to imply it. Of course, the next natural step is finding the best way to get going.

There are a variety of product analytics solutions available, each of which provides a different form of report charting the user experience.

Among the many alternatives are Google Analytics, Mixpanel, Amplitude, and Kissmetrics, to name a few. However, firms will likely need to join up with many platforms to collect the entire range of data they require.

A variety of information is available on each of these platforms, including material tailored to enterprises with a wide range of target customers. Product teams should conduct extensive studies to identify the most appropriate tools for their objectives and working procedures.

Furthermore, it would be best to integrate product analytics appropriately with your tools and websites to have the most significant impact. You may use a line of code or an SDK in this process, and the results will depend on how well it is implemented.


Do your study to determine which tools will work best for you in terms of time, budget, and resources.

Keep in mind – There should be a clear structure for determining who is responsible for what after data has been acquired. When do stakeholders become aware of problems and the plans to resolve them, and how are they informed? Which developers are in charge of putting the modifications into effect, and why?

Consider the answers to these and other comparable questions to avoid misunderstandings or oversights.

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